The market (S&P500) in 1Q’19 was a relatively unique ride to the upside; and some of its main accomplishments were:
(1) completing the backside up-leg of a big V-Bottom,
(2) breaking the last topside resistance on the wat to a new all-time high,
(3) nearly breaking above its long-term trend, and
(4) performing as one of the top eight first quarters in the last 40 years.
In 1Q’19, there were many reasons “planted” by the press and newsletters about the market stalling and running out of steam. For example, the market took a big hit near the end on the quarter on the news that the yield curve had inverted (that is, the 3-month yield had surpassed the 10-year yield); and this is supposed to be an indicator that the USA is facing a recession. The day that “news” came out, the market took a big dive as many traders (and quantitative models) got sucked in. But, even though this “indicator” has a relatively good record at predicting recessions, these recessions are predicted to happen 6-24 months in the future, NOT now. And, we all know that THIS short-term yield came from decisions made by the Fed, NOT the overall economy.
Right now, and in the near future, I believe that US companies will do well and continue to grow at rates much higher than the last half of the last decade. And, when companies and their earning go up, their stock prices go up also.
The performances of MIPS3, MIPS4, and MIPS/Nitro models were all positive and this continued through 1Q’19 (see the graph for MIPS/Nitro below). Note how Nitro avoided the big -13% dip at the end of 2018.
MIPS/Nitro Performance (2018 – 1Q’19)
- see below
MIPS +7.5% SPY +5.2
Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC